>> a warm welcome to "bloomberg go." david west on is off this morning. our top story, the attacks in brussels yesterday have so far left three people, 30 people dead and 230 injured. in the last hour, they suspect the mastermind has been caught. we pause for a moment of silence. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. isit ncicap.org]

stephanie: you have been watching a moment of silence in brussels as the city begins three days of mourning. the attacks yesterday have so far left a total of 31 people dead and 230 injured. for the latest on the investigation, we are now joined by bloomberg's ryan from brussels. yan, give us the latest. ryan: well, we're learning an wful lot from the people who started the attack. police apprehend adamant that is

the mastermind of the attack. he is a 24-year-old of an individual. going into today, he was in syria in early 2013. and then a very minimum, he was an associate of one of the participants in the terrorist attacks. so as we look at the belgian and french prime ministers there at the mourning ceremony for the people killed here in brussels, you can bet that they will be also talking about how they can better coordinate to make sure there are no more terrorist attacks. stephanie: while clearly today is a day of mourning in the city of brussels and across europe, as far as business goes in the city, terminals being open, markets being open, people being back to work. what's the sentiment? ryan: yeah, you know, i mean, people are going back to work, but not here. i'm right outside of the

european commission building. they're closed. about 300 meters is the subway station. it's closed. it is the site of the second attack. that's where the majority of the people were killed. the road is still closed. and there is a robust police presence here. so there's not much going on in the center of brussels. having said that, it's a big city. and people are going about their business as usual in many other places. it's just that in very diminished numbers because clearly, a lot of people have chosen to stay home today. jonathan: ryan, just in terms of the last 24 hours, a lot has been said about the mistake being made. the fact of the metro wasn't shut quick enough. what's being said about that? ryan: yeah. there's a lot of soul searching going on here. just as recently as friday -- last friday, i was here for the e.u. leaders meeting and i was saying to myself wow, the security is quite lacksed and

you could appreciate that because they've never had a terrorist attack of this scale in this city. there were concerns about individuals here having links to terrorism, but always committing their acts outside of belgium. there's going to be a lot of hard decisions to be made now about airport security, about security at government buildings and just in general, about the level of personal freedom that people can expect to have going forward. stephanie: and these tough decisions that need to be made, who by? we're talking about many, many countries across europe with different motivations and different governments. ryan: well, the issue is they need to make a lot of the decisions collectively, right? they need to start sharing intelligence more effectively. they need to start cooperating in terms of criminal investigations. so actually, they are going to gather. the interior ministers on thursday and friday. and they would all say that up

till now, their communication has been woeful. one of the things that the prime minister will be telling the belgian prime minister is when are you going to extradite the main participant in the paris attacks that you apprehended on friday? they still have to work out things like tradition not to mention border checks. this is all the passport-free travel zone. i can go as i did yesterday from france into belgium without any check at the border. i didn't even know that i crossed the border, in fact. there are a lot of e.u. leaders saying we can't be doing that with terrorists running around the countries. jonathan: thank you, ryan. our thoughts with the people of brussels and the people affected by the tragic events of yesterday. a quick check on the markets now. european markets are open. we're seeing gains across the board. the d'backs back down. dow futures lower this morning. the dow snapped that winning streak. down by five points pretty much dead flat on the s&p 500.

our top corporate story. most red story, credit suisse trading high. a strategy update. another 2,000 jobs to go. another 1.7 swiss francs to be cut. and that's a big story for us this morning. the pound weaker for another day. three months implied volatility. big pop as we are three months to the day away from that referendum for the u.k. and the future in the european union. and the u.s. 10 year at 1.93% down. w.t.i. trending $31 flat. stephanie: i am amazed by valiant. valiant had a big comeback yesterday. is it that people truly believe in this company or do you look at some of these prices and simply say so cheap, time for a trade? we're going to dig in a lot of this trade as the morning unfolds. jonathan: the banks forecast

another loss in the first quarter. plans to cut an additional 2,000 jobs. and an "interview with the lacquer,with fran seen credit sweetest crow. it's cost us ou but it's protect us a lot. if we had not the risk the way we've done since we found out given the faith of the first quarter, the numbers will be much worse. jonathan: francine, brilliant interview. he's getting a lot of pushback this morning. investors might be happy but the stock has been pounded. a strategy update five months since the last one. gives the why. francine: he thought he needed to accelerate the restructuring. so he unveils -- he's been in the job since june of last year. and then he unveiled a new strategy in october including

downsizing the global markets which is the division that houses the security trading. now he saw the fourth quarter results weren't as expected. and that is crucial. he thought that he didn't like -- he is further cutting that it and that means more job cults, and just doing what he promised in october, not quicker but more of it. the question many will be asking in terms of job cuts. how secure is his job and how long the board will allow him to sit in a seat and play out when you talk about those cuts. it was in october when he talked about pulling back in the securities distinction. he now sits for the first time then before announcing it internally. in terms of people he can even keep in their seats, what's the morale got to be like there? francine: well, it's a good

point. he hasn't been charged for 12 onths. a lot of shareholders putting him under pressure because hear testing him. is is someone that had led prudential. the shares gained a lot. they doubled in six years. a lot of people on the market maybe trying to test his resolve and pushing him to cut the investment bank more. for now, his future seems ok. but i guess we'll have to see if it becomes more uncertain depending on the share prices. jonathan: he ran prudential and insurer. when you look at barclays, john went to look for an investment banker because he wanted to restructure an investment bank. a lot of peel stell talking about whether he's the right man for this job considering it took him so long to find out for this position. when you sit across from him, do

you still sense he's trying to justify he's the right man for the role even though with several months into his tenure? he clearly inmated 9 that there's a -- sbin mated that he did not know because people did not tell him. he is confident that he has the regulation or the metrics in place to ensure that does not happen again. you're right. he was the -- criticize because he didn't -- but think of barclays. if you come from the investment world like bill winters who is now head of the standard -- you can't -- if you don't come from the investment bank, then shareholders or markets tell you you can't run the investment bank. so it seems like it's a

lose-lose situation no matter where you sit. investment banks will not. sofia: another piece of this fantastic exclusive interview. you had this about dividends and whether they're going to be keeping it. >> even though we said we have a strict dividend, we said we would keep it in place and then remove it. we will get to a position from 17 where we can really generate capital and cash. sofia: cutting, cutting, cutting. where are they going to make money? francine: well, this is a trategy. and he wants to have the investment banking and support those wealthy asians. this is a tragedy that we've seen in other banks.

remember, this is what u.b.s. did about three to four years ago, narrowing down the idea and focusing on wealth management. he thinks that he has a winning strategy. it's a one-stop shop for billionaires that may not have a lot of cash flow. so they use the investment bank to make acquisitions and i also gives them money to manage. jonathan: this fascinating moment on the call when he said that he asked to take a 40% cut on his bonus out of solidarity with the rest of the firm because about a third of the firm didn't get any bonus at all. looking forward for this company not just for the payouts for investers and for the star. when you ask him is that it? can we expect more cuts to come down the road? what did he say to you? francine: he said he hopes this is it. he says i'm an honest person.

so i cannot give you 100% assurance that this is it. he seems to me like someone who's really trying his best. he's looking at the banks. he's looking at it very closely. on the issue of morale that stephanie was alluding to, this is a man that wants to make sure morale is high which he says it's right for me to take a bonus doubt show the people that i'm in it with them. whether we will see a tenant leaving is something that we need to watch out for but he's on fighting spirit and he thinks -- he's relieved that he could come out with this restructuring plan that he said he has not seen when he gave us his strategy updates. stephanie: the question will be out there. is his best good enough? thank you to our own francine laqua with her interview with

the c.e.o. next, london mayor forest johnson weighs.

>> shares of nike are falling in premarket trading. there's concern about growth in the world's largest making of sporting goods. nike missed estimates. competition from under armour is putting more pressure on nike in the u.s. hermes beat

earnings. they plan to raise prices about 3.5% this year in europe to make up for higher production costs. standard charter is demanding more loans in the diamond business. the british bank lent $2 billion to diamond processors. standard charter wants clients to get payment insurance. diamond cutters have been hurt by slowing demand in china. jonathan: thank you very much, david. here are the top story in the city of london. the london mayor folk the house of commons treasury select committee. he stated that the city of london would flourish outside the european union and would not lose its position as a financial hub. >> what struck me in private conversation as often have with finely bankers is how

balanced they seem to be. and most of them more candidly say they don't believe it will do any damage to london's position as the world's leading financial center. jonathan: guy, the argument of the last 24 hours has been dominated by what's happening with immigration, with refugees but the argument that boris johnson is trying to push is the economic one. where are we in that debate and is winning? uy: he said where we stand the economic. he said that the pound would be strong and robust outside the e.u. and he talked about the fact that the e.u. could do a very rapid deal with the yufmente so he is making a political argument and an economic

argument. the economic argument is you really don't need to worry about it. but he's really focusing on the politics, john. stephanie: why is it that you don't need to worry about it? in the past, he's made the economic argument. is it not that he's turning away from that? guy: what he's saying is that it probably doesn't make much difference either way economically but it will make a difference politically. and i think if you look at some of the survey that's being done, some of them suggests you're going to see a huge crater that once was the u.k. economy. and another is suggesting unbalanced. the point that boris is making and as a result of which will end up the economic structures that currently is still remaining butt. but the political control is where you'll see a change on that. jonathan: love the value on the strong pound. guy: let me turn you to the bloomberg and show you what's

going on here. it is absolutely fascinating, john. this is the story over the last couple of days. you see this decline. this is the cable rate. as you said earlier, we're now in the three-month range. so this is cable three month volatility. as you can see, now a massive spike to the upside. the market doesn't really understand where cable is going to go. so the market is going out there and buying protection the other chart, this is really fascinating as well. so this is the three-month risk reversal. this is the skew between the out of the money position on the upside and on the downside. and it's quite a good gauge of where directionally the market thinks that sterling will go. as you can see, that has absolutely fallen off a cliff. so the market really pricing in over the last couple of days and expectation over the next few months that we will see sterling very much coming under pressure. jonathan: guy johnson getting a

little more expensive. thank you for joining us. next up, we'll look at e.u. leaders. their next step secures their country following their country's attacks. ♪

stephanie: welcome back. you are watching "bloomberg go" according to belgian state broadcaster, the main suspect in the brussels attacks has been caught. later this week, e.u. interior ministers are expected to meet in response to the attacks. joining us now from washington is former c.i.a. director james woolsey. there are conflicting reports but some say all three suspects have been caught. if that's the case, is this ver? james: i thought two others have blown themselves up but if all three were caught, i don't think we should take much heart from this.

we're going to be having to deal with terrorism for a long time. and at transportation nodes like train stations and airports, it's going to be very difficult. we will fail as long as we are only playing defense in europe and the united states of place where is there are lots of people. stephanie: apologies for clarification. what i meant was one potentially caught and others dead. if all three are no longer in the mix, how much of a threat does this continue to be? james: got it. well, isis is the threat and isis controls a chunk of syria and iraq and is still recruiting in the communities, such as the suburb in brussels. from young muslim men who have become radicalized. so one group of three or even nine or 12 or wherever many terrorists caught is not going

to do the job. when you go enter a hockey match against a team that is really good, you don't win just by having your goalie catch -- stop every shot. you have to play offense on the ice as well as defense. and we're not doing that very well. jonathan: in your capacity as the former c.i.a. director, how difficult was that role versus what the europeans face where we're talking about 28 countries plus turkey on the border? how dills that job of getting the intelligence that they so desperately need for the european union? james: well back 20 years ago when i had the job, it was sunny days. we had won the cold war and everybody was relaxing and telling me we didn't need a c.i.a. anymore and we could save all the money and so forth and so forth. so back in those days, things were very different than they are now. i would say today europe has greater vulnerability simply because it's closer and it's easier to get from syria, let's

say to brussels or to france than it is to get across the ocean. but we still have attacks, such as the one in san bernardino, california, here, a few weeks ago and we will. we may have slightly fewer than europe, but we needed the -- neither the europeans for the americans are going to win this just by building up their defenses at airports and transportation nodes and other place where is there are large numbers of people. stephanie: and we certainly do need a c.i.a. thank you so much for joining us. former c.i.a. director james woolsey. thank you. coming up, portugal rejected its first anti-austerity budget last month. we'll be speaking to the minister of the economy. ♪

jonathan: hello. good day to you all. let's get a check in on markets on futures and on european equities as well. s&p 500 up about a point this

morning. dow futures up by one. tse, about up by 1%. switch up the board just very quickly. credit suisse, restrategy. the stocks 1.7%. cable weakness, 14190. yields coming in on treasury at 1.94%. and oil down by 1%. $41 a barrel. tune into bloomberg a little bit later. n exclusive interview with jim bullard. tom key is with us. tom: he's really a centrist but there's also a nuance and always a twist. jonathan: and a hawkish tilt. tom: yeah, or he can tilt the

other way too. jonathan: that's coming up. do not miss on bloomberg television. first, here's david. david: main suspect in the terrorist attacks. one report says he's been captured. the other men were brothers who were suicide bombers but another report says the man arrested by police is not the main suspect. a taxi driver led police to their home. authorities say chemical products and an islamic state flag. it was a big night for donald trump and hillary clinton. both took another step closer to winning their party's nomination for president. bernie sanders won democratic caucuses in utah and idaho. trump won all 58 delegates in arizona's republican primary. ted cruz was the big winner in utah. we'll hear from trump today in

an interview at 5:00 eastern time. and president obama is now in argentina earlier today after a flight from cuba. it's a first visit by a u.s. president there. he will meet with argentine president who was sworn in december. mr. obama wants to show them the u.s. and cuba are in better terms. stephanie: tom keene is here because it is time for the morning must read. ou're bringing to roger cohen? tom: he has terrific perspectives. here's the back end of an important op-ed from roger cohen. the question raised most urgently by the brussels attacks ays --

jonathan: john really speaks to the multitudes and the degrees of freedom that europe has and the many choices. jonathan: it really does. straight afterwards, the security response was a geographical location where this was festering and it was afghanistan. so that was the target. this time, it's very different. you have this region, this district to the west of the center of brussels that a lot of people are focusing it now, calling it a hot bed for terrorism. i keep saying this but it's so important. the threat is not just outside the borders of europe but within the borders of europe. that's a big challenge. tom: how do the people of the united kingdom feel about this? there's so many newspaper angles in the united kingdom. i can't figure out what consensus is. jonathan: there is no consensus.

the debate is so polarized. a lot of people that want to leave the european union take this as an example and saying we would have more secured borders if we stepped away from the european union. the people on the other side of the bait said we need to be part of the e.u. we need the unity. stephanie: there's also a fact here in the united states. raj's point -- roger's point is the obama strategy isn't working and it gives rise and space to the voice of someone like donald trump. tom: i would suggest the president's strategy which has been to eliminate roughly one quarter of the isis people within their geography and to john's point, it's which geography are we going to look at or focus on beyond? clearly, in talking about the ambassador suggested that there has to be sop some lessening of liberties within europe. stephanie: but donald trump

would make the argument define what the isis people are. who are they? which does give him space to say let's block our borders. tom: i think that mr. trump has had a number of opinions and that will be front and center with john heilman and mark helper tonight in their conversation with mr. trump but of the many foreign policies of donald trump, there has to be a filtering of that to the convention and beyond the convention that's a more certain message. we don't really know what that message is. stephanie: he's been really clear about the me. let's amp up torture, water boarding. tom: i think that's one of the messages we've heard from mr. trump. jonathan: when you look at what happened last week, they arrested the guy that many consider the suspect of the center of the paris attacks back in november. and then days later, you have this kind of attack. that attack points to what a lot of people are arguing that there

is a support network within brussels that help keep this guy away from authorities for several months and as soon as this happen, they can respond quickly and did what they do. that says to me the threat is across europe. tom: and mr. cohen made that clear within his essay. jonathan: tom keene, thank you very much. an important must read. we keep it in europe. we're going to talk portugal now. they face challenges due to slow growth. but they made clear they are committed to curving the debt of g.d.p. ratio. other euro area wants portugal to come up with a plan in case they did not meet its target. we're joined by portuguese minister of the economy manuel cabral to discuss portugal's plans for the future. minister, great to have you with us. manuel: good morning. jonathan: our talkings are with the people of belgian this

morning. but for the minister of the economy in europe to push debt to g.d.p. ratio down to different ratio, do we need reflect, take a seat back and say we need to take more time, put more capital into security? manuel: i think we have to be aware of security. what happened in brussels was a tragedy. we have solidarity with the belgian people. and we have to look at security. but we have to look at the external policy of the european union. they have to worry about its own problems and the lack of involvement didn't help civilize the region. of course the problem is much more complex and i agree with you that in some countries, there are communities of dasha that are inside the country.

closing the dord does not elp. stephanie: if there are communities within those countries, you have to protect yourself and that's not a friendly neighbor for you. manuel: belgium is a friendly eighbor. we are worried about this community but we are worried about all europeans in the same way because this is a threat to western countries, to european countries, and also to the united states. and we have to face it together. that's my vision about it. tom: in your study of economics, i'm lure you looked at the transfer of that. tell me about the new portugal. it is such an interesting economics over the decades of the 20th century and even into

this century. how do you jumpstart economic growth in portugal? nuel: portugal has to face globalization with the wrong special accusation. -- specialization. we have to have a rough time in the last 10 years, changing that structure. and now the country's exploring completely different like machinery, chemical problems, tourism as well. we are having a very good time in tourism. and for instance, for the united states in the last five years, we have more than doubled our exports. so we are having very interesting growth not just in our protective which is not protected anymore. european market but in global markets and in the very tough and demanding market like the

united states. so i think we have turned the corner of growth and with a different type of growth, export-led growth and growth based on different industrys and different sectors that we can be competitive globally. stephanie: you mentioned tourism. are up concerned that it will take a leg down following paris attacks, brussels attack and the immigrant crisis? manuel: we have not been affected by the immigrant crisis by all geography. we are in the atlantic. but i don't think it's going to affect. i think for a reason that the train favored us because some of e tourism in the south and mediterranean compete, which is with our lovely beaches in portugal. so some have been detered to portugal. so we are benefiting from that but we don't want to benefit

from that. tom: john farrell said i couldn't come on set until i ask this question. stephanie: when did you follow orders? tom: where is your optimum level of euro dollar right now? manuel: i think the euro dollar, the parity would be a good level for the currency. the adoption of the euro has been a good thing for portugal. we have imbalance. and now we are in surplus for three years in a row. tom: but is it a drug to societal solution? if you go through parity as some suggests, we will see. do you have a level where you say this is right for the people of portugal? manuel: i don't think there's a right level. the right level is the one that balances the council the eurozone. in a sense, the eurozone was too worried about inflation that never came. and got into deflation. so evaluation is the right

policy for our situation. and overevaluation of the euro was the wrong policy. tom: did i do ok there, john? jonathan: you did very well there. this extra layer of complexity on banking system right now, a lot of people are tracing that recent complexity back to portugal when portugal bailed in senior bondholders. as you listen to that situation , it has evolved since then are you confident that the problems in the portuguese bank sector have been addressed now? manuel: we are confident there that these problems are being addressed. we are working on that and there's also european solution and intervention of european central bank guarantees their stability. i think the situation in the financial markets improve in the

last two or three months. it was more cold when we were in battles. i think it's warmer now. and i think we are improving our situation. we still have a longer way to go, indefinitely of the country is not a good thing and we are putting down. but the good news is that the last year and this year are going to be years of decreasing indebtedness of the country and we are going to be one of the countries that is going to comply with 3% -- less than 3% of different, with a different of 2.2% of g.d.p., which is -- we are going to be in the minority of the countries complying, which is a good thing. and i think we feel confident. jonathan: that's a great thing. spread to steel 270 points of portuguese debt over germany. what is your message for the ecbqe?rket even with

manuel: i think we are going to not eliminate that spread but i think the spread is going to decrease. however, the end of performance of last month is going to turn into a better performance in the coming months because i think the spread now is too high. and i think the markets are starting to recognize that and in the last two months, the spread has actually decreased. so i think we can look at that in a realistic way but in a positive way. jonathan: to the portuguese minister, manuel cabral, thank you very much for joining this program. a quick reminder. tom keene talking about euro dollar. his interview with jim bullard in an hour and 20 minutes from now at 9:00 eastern. do not miss that important interview. stephanie: before that, here is a look at buick's new 2017 encore s.u.v.

we'll have that next right here in our courtyard, normally t bentleys in front. today, it's a buick. we will have duncan aldridge to talk about the new car. [newline]♪

david: coming up in the next hour, mark fields. ♪ stephanie: the c.e.o. of credit

suisse is promising more cross cuts. it is the sec one in five months. an additional 2,000 jobs will be cut. they drop as much as 45 pkt in the first three months of the year. losses are due to restructuring charges. there's a warning in the oil industry could lead to future shock. producers have cut billons of dollars because of the plunge in oil prices. that could result in oil supply shocks in the not-too-distant future. after years of setbacks, the expansion of the panama canal should open by june. it may shift international trade routes. ships will be reach asia more than two weeks faster than it would go east. and that is your bloomberg business flash. over to matt. matt: the new york international car show kicks off today. and automakers are eager to reveal their latest cars, at least to members of the press. buick just rolled out a new 2017

encore. it is the fourth all-new updated s.u.v. which will be available this fall. joining us is the global vice president, duncan aldridge. stephanie mentioned we typically have bentleys. today, we have a buick. how do you see your brand in terms of premium vehicles in terms of the luxury markets? >> we're positioned between the mainstream and the luxury brands and we wept attainable luxury and it's proven a very successful formula. matt: it's one that not a lot of car makers are aiming for. who do you see as your competitors in this space? because you're still fitting yourselves below cadillac but above a g.m.c. david: -- duncan: absolutely. people are buying top levels of

the mainstream car or an alternative to that tier one luxury vehicle but we offer more equipment for a lower price, representing a better value for money. matt: we had a great story on the bloomberg terminal yesterday pointing out that buick's growth is a lot stronger than what people realized. 43% globally and you sell over a million cars a year in china. the last emperor of china was a buick man. what kind of success have you got there and what kind of growth can you look for since you're so entrenched already? duncan: we're a top three brand in the market in china, over a million unit last year. that helps us get a global sells record last year. the growth rate in china is moderating somewhat for the whole industry but we see 3% to 5% per year. there's lots of investments in buick. and that will propel our growth further. matt: when we look at growth here in the u.s., we also see strength that people may not have realized.

since 2012, the story said 23% growth faster than a lot of other rivals including cadillac. you ion outsold audi in the u.s. last year. but it's really the encore that's been the engine or at least the 2015 engine. what do you expect to grow sales in 2016? duncan: well, the encore invented the small s.u.v. segment. and since then, many competitors tried to come in. but i'm pleased to say the encore is still the best-selling s.u.v. in the united states. matt: you sold 68,000 last year. >> from that position of strength to be announcing thing the new encore completely re-designed exterior and an amazing interior and a new touchscreen entertainment system. we believe our sales can be even higher. demand has exceeded supply the whole time for encore. we've been putting a lot of investment and energy enter

building more. so we still see further upside for the growth in this vehicle for us. matt: duncan, thanks for joining us. global vice president for buick and g.m.c. see you at the show. coming up, the latest on the investigation into yesterday's attacks in brussels on "bloomberg go." ♪

stephanie: you are watching "bloomberg go." we continue to cover yesterday's attacks in brussels. so far, 35 people have been pronounced dead and 230 injured. there are now conflicting reports on whether a suspect has indeed been caught. for the latest, we are joined in brussels by ryan. ryan, give us an update. ryan: good morning. there's been lots of confusion as you said, lots of conflicting

reports. at one point, belgian's state broadcaster was saying that the mastermind had been captured. now, they retracted that report. we are waiting on a statement from the prosecutor here in brussels. he's going to make a statement any time now that could be at the top of the hour though. i'm told that the journalist that are being let into the room for this statement are all being searched quite thoroughly. so it could be delayed. but everyone is waiting on that press conference or that statement from the prosecutor to find out where we are in this police investigation after all the conflicting reports. stephanie: seeing that there are all of those conflicting reports, there you are on the streets of brussels. what's it like from a security perspective? ryan: well, look, there's a reasonably robust police presence on the streets but you would expect that. just 300 meters down the road from here is where the subway station is. that's where the second of the

two terrorist attacks took place yesterday. that's where the majority of the people were killed in the terrorist attacks. and i'm quite literally surrounded by buildings that belong to the european commission, the executive arm of the european union. so you would expect the kind of security that we have here. but perhaps more notable than that is there just aren't that many people around because the road has been closed. and a lot of people that would have come into work can't do that. stephanie: they might not be around but they will be tuning in at the top of the hour when the prosecutor in brussels will be speaking. coming up on "bloomberg go," mark fields will be joining us. it's the auto show here in new york. ♪

jonathan: a federal prosecutor in belgium talks about the latest in the deadly brussels attack. isis takes credit for the attack.

-- swiss bank cuts an additional 2000 jobs and pledges to celebrate restructuring. exclusive interview with president and ceo with the federal reserve bank right here on bloomberg. ♪ jonathan: a warm welcome to bloomberg go. closely monitoring breaking news out of brussels marie expect to hear from the federal prosecutor at any moment. stephanie: we also have an interview with mark fields, president and ceo of ford motor company about the underperforming stocks. -- t,

here to share where he sees value in the markets and specifically, m&a. before that, we get some first word news -- some markets, particularly because if anything, if you look at volume following the brussels attack, the threat that we could be getting closer to grexit, we are seeing markets slow in terms of volume. jonathan: let's bring up the futures board. s&p 500 futures down by around two points, now futures snapping up. travel and leisure stocks under pressure but resilient equity markets in the face of the terror attacks. switch of the board, the biggest corporate story, credit suisse, a strategy update, five months since the last strategy update.

investors like what they hear, this morning. the stock has been pounded since before today. the losing streak continues. brexit risk on the table. stephanie: if you think about how slow the recovery has been brexitpe, the threat of is only going to slow it, further. jonathan: fueling the debate. stephanie: the fact that the mayor of london could turn and he has been making an economic argument all along, he can turn following yesterday. let's give you a little first word news. >> in belgium, there is a manhunt in the country's worst terrorist attack ever. a third person in the surveillance video taken just moments before the explosion has been arrested. the two others were suicide

bombers. the taxi driver who drove the three to the airport reportedly took police to the apartment where they found bomb and chemical products and an islamic state flag. airports around the world boosted security after the attacks. in the u.s., the department of homeland security said there were no specific threats. law enforcement personnel have been assigned to airports, train stations and -- donald trump and fuller clinton both took a step closer to winning their party nominations. hillary clinton one big in the arizona primary. bernie sanders one idaho and utah. donald trump one all 58 data that delegates in the arizona primary -- delegates in the arizona primary. we will hear from donald trump in an interview on all the respect -- all due respect.

jonathan: a quick reminder that we will bring you the breaking headlines from that news conference in belgium. for now, let's cross over to the most read story on bloomberg. credit choice and announcing another restructuring through deeper cost cuts and more jobs to go. forecasting a loss in the first quarter. pledging to focus on wealth management and growth in agent. the bank ceo spoke with francine lacqua in an exclusive interview. what we have announced today is we are pushing further and shrinking global market more. everybody has loved the reaction. january was the worst january ever.

francine has more from the city of london. thank you for joining us. hearingtion i keep asked, five months since the last strategy update, the worst january ever, two backorders. they say it is bad out there, but 2000 jobs? another 2000 to go? remember that he unveiled the strategy in october, very clear that shareholders that we have been speaking to were not too happy. a lot of people said they wanted more details and they wanted to cut further. the ceo spoke to me earlier today and set a look at the trading figures and was not happy with them, but also integrating something else, the quotes because he said it was not clear to many people inside the bank of the positions they had taken.

he is talking about liquid thiss and this threat and leads me to believe that it was the reason why he is now cutting assets in global markets, that division which also has security trading alone a further. insked him if that is it terms of cutting and he said yes, but then the environment is uncertain. we are confident, but this is a very dislocated economy, very dislocated markets. stephanie: here is what i don't understand, if shareholders are clearly asking for clarity, the one place banks have added headcount is to risk management

and compliance, how does a ceo get blindsided by asking -- adding risky positions? concern, thee concern for the markets today, this is what some analysts are saying how could this happen and you not know? i spoke to him for around 10 minutes and he nuts to any other intelligence. that he did not speak to any other intelligence. what we know so far is that he was not aware of his position. -- had he beene aware back in october, what the strategy have been below that more viable, what he have cut more of that unit and he told me yes. >> i am a very confident -- risk

adverse manager and the risking we are doing has cost us, but it would cost us more we have not done the risks the way we had done in january, the numbers would be much worse. his position was clear, he told me it was not clear to him, not clear to the cfo thatany people inside the bank had taken some of these positions that he settings to get a cultural change because it is completely unacceptable. i asked him when does he hear about the political position that concern him and he said january. jonathan: compensation in the spotlight, he did not take any bonus at all out of solidarity and would take a 40% bonus cut. the question that we will maninue to wonder is is the the right man for the job?

it looks like that is not the focus right now, the focus is to clean up the mess and how does that -- how long does that take? >> it is the strategy going forward, of course there is always the concern that you cut some of the muscle with the fact. -- the fat. the other issue is he is training to do this strategy overhauled is very ambitious at a timeredecessors when markets are not in favor with negative rates and what we heard from the fed. it seems it has been the bankers to try to change the bank at a time when the economy is not on your side. they paid out not great bonuses out of solidarity, let's not forget that being a banker is also a people business. if you don't have the talent

that follows you, then you will lose to your rivals. let's go broader in terms of his refocusing the strategy. push into asia and going bigger in private wealth management kind of seems like everyone is doing that. ubs seems to have the winning strategy because this are doing this cointreau or five years ago, -- ubs is the one that could increase bonuses, this is what we found out, about 10 days ago. if you look at the ubs credit suite, to have been in charge for nine months, they will go after the wealthy asian, slightly differently, but this is the point we were making off of fourth-quarter results.

know the ceo that well, trying to figure out his strategy with a similar model that has so far proven quite resilient which is ubs. i would argue that maybe they need a bit more time, but if he wants to take the risk now -- jonathan: i want to cross over -- thee hyman because stock was down some 40% and just goes to show you how tough things have been all set -- have been. julie: it is still more expensive, at least on a price-to-book stasis. we are talking about a lofty valuation, all of the banks are valued at a discount to where they have been, historically but curtis reese is in white -- credit squeeze is in white.

this is a bloomberg intelligence index of u.s. banking peers. bottom, bank at the this goes to the question of isse worthedit su given the news we have gotten, today? stephanie: when a headline reads that a ceo was blindsided, that is not good news. thank you to francine lacqua for an excuse the interview -- for the exclusive interview. next, we dig in with paul carbone. we will be checking back as we monitor brussels one day after the attack. ♪

>> you are looking fit -- at pictures of the belgian federal prosecutor holding a conference on the attacks on tuesday that left at least 25 dead. we are live in brussels with the latest. of news coming out of that statement that the prosecutor is reading. let me take you through some of the headlines, most important is that the manhunt is still on in brussels. police confirmed they have not detained the man they believed to have been the mastermind of the attacks. earlier in the day, we had reports that he had been detained. the prosecutor clarifying that it is not the case. they are actively searching for an attacker that they have

identified. beyond that, they are confirming that two brothers were involved in the attack, suicide bombers that blew themselves up. now the prosecutor is confirming that. we have an updated casually -- casualty count, 31 killed, at least the police now saying 270 people injured. that is pretty much where we stand, right now with the notable additions that they also found the will of one of the two suicide bombers. jonathan: going forward, what have they learned from paris? what can they learned going forward as this develops? catch the man, that is the lesson of the paris attacks. one of the paris attackers eluded the police for four months i was only apprehended on

friday here in belgium. get that thirdto individual who they think was the mastermind of this attack. it may sound odd, but they are suspected of being associates and the two attacks may be linked, but all of their efforts have to be focused on finding that individual, they are concerned that there'll be more attacks if done in brussels, possibly somewhere else and they know that the longer it takes for them to catch the individual, the easier it is for that person to go to ground. ryan joining us from brussels, we will be checking back with you in just a few. let's turn to some deal business, m and a. the deal volume and size at record highs last year but u.s. dealmakers are less bullish about 2016 with stock prices and economic conditions. paul carbone is with us, managing partner of the

pittsburgh group, private capital. even though things are not as strong as they were last year, it does not mean that m&a is. what does the climate look like? very strong momentum coming into this year, except we hit the cause button in the early part of january. if you look at the statistics for the first couple of months, m&a is down, both in the number of deals and the volume. the m&a market volume is actually up and statistics are up and what i think that is saying is, we are coming into the later stage of the economic cycle, sellers are worried about losing the window. they missed the window back in 2008 and 2009. we have high multiples being paid, today. they don't want to miss the window, again. you'll see more deal flow, but a messier market. stephanie: in terms of public

markets, it is easy for investors to shut down their computers and put their pencils down. in m&a, getting these deals done takes months and months, it's not like you can just stop the train. you can't stop the trade, but you can slow down the process. if you are ready to hit the market, you did not enter the market. stephanie: are we pulling off that pod bottom -- pause button? mark: paul: i think -- paul: i think we are. jonathan: credit suisse you must be looking at that stuff right now, doing they, deutsche bank and the rest of them come out and say they are pulling back. paul: we use permanent proprietary capital, we don't

have traditional funding. we don't have a traditional fun structure we don't have third-party investors, we don't have a time bounded approach to our investment. we have maximum possibility in terms of how we invest, so we can take advantage of cycles and issues in the marketplace, we can build the companies. stephanie: does that mean that oil and gas look cheap to you? if you've got permanent capital, no outside investors knocking down your door, is that the sweet spot mark paul: we don't invest in the energy spot because there are issues that we are comfortable with. is what isnt point happening in oil is rippling through the economy, we are seeing the impact in capital aboutng, it is estimated a third of the capital spend of the s&p 500 was energy-related,

gone. $1 trillion of spending is gone from the economy, it has rippled. through industrial manufacturing is result is on its back and in servicesonary mode and looks like it is beginning to follow, it is weakening. all that says interesting opportunities coming up in the next several months. jonathan: you have a not -- you have not talked about where they are. market is expensive, the multiples we are seeing are the multiples we saw back in 2008. what we like our some of the sectors that have durability through various volatile markets, so food, is a really interesting space. stephanie: what do you mean, food? paul: we player -- we play everywhere from the farm to the table.

we manufacture all sorts of different food commodities, we are looking for intermediate stage production. packing is another related product that we like a lot because you think about packaging, it is usually what ends up in the trash bin, but the reality is when you have a deflationary environment, you can't push pricing for the marketplace. how do you entice customers to buy your phone? innovation -- buy your product? thank you very much, you will stay with us. cme.oins us from the i know matt miller timestamp did, last time you were on the program, we were treating around $31 and you said we would push back to the 40's and we did, so an easy question, what is next? are you going to timestamp this one? or hetalking about around

one dollars by midsummer, looking at some of the demand for the summer driving's is -- season and refineries coming out of turn around and you see that in the numbers, you are not seeing crude draws, but you are seeing refinery draws. it has on extremely quickly and we are really seeing that reduction in supply. i have to state that the overall situation of oversupply in the market is not changing anytime soon and you are looking at capital spending continuing to be pulled back. that will have an effect on the barrels, but it has not, yet. you will see a pullback in the next few weeks, down to about $37. i'm not in love with crude, here. i am still in the trade, but i am lightening up. paulhan: a quick question, mentioned the cut -- the cap x cut.

why don't i see that on the bread curve -- brent curve? i think because the oversupply along with the beginning demand is so dramatic. we don't have a handle on what the oversupply is. in million barrels a day venezuela, but we don't know if that data is correct. stories floating around about 900,000 barrels missing. you have the risk -- the potential for opec and russia to cap production. saudi arabia is already at maximum production. that spending is not going to increase at $40, not at $45. people talk about shale producers turning the well back on. you are looking at energy that has a lot of wells that are in the ground and ready to go, but

they are not running at this point. jonathan: thank you very much for joining this program. paul, the destruction of , how dramatic is it and when do we start to see it in the market? paul: i think the point is, the uncertainty, how do companies spikingwhen you see oil , how do companies plan and think about considering capex? resthas an impact on the of the economy, so the internal -- the uncertainty in oil is the key point in terms of -- we need a bit of stability so people can plan their forecast and understand demand characteristics and the manufacturing folks can plan their supply curve accordingly. . thethan: given how fragile

economies are, are you more focused than ever in u.s. investments? we invest in north american companies, we think it is the best economy in the world. would you like companies that have global capability. they want to take advantage of global opportunities. withhan: managing partner pittsburgh group private capital. stephanie: he has never eaten at carbone. up, a thirdming party has reportedly contacted the fbi to help unlock a terrorist iphone. talk about that and private security next on bloomberg go. ♪

stephanie: welcome back, you are watching bloomberg go. we have an exclusive interview with james bullard, president

and ceo of the federal reserve bank of st. louis at the top of the hour. extraordinary silicon valley investor, cofounder of at a par -- we will do into where he sees great value in tech, but first we take a look at these movers, specifically in europe and ahead of the open. about 60 minutes away from the open, but i want to get you up to speed. stocks riding high through much of the morning, another 2000 jobs to go, $1.7 billion -- swiss francs in cost savings. stocks up by 2.4%. luxury goods maker out this morning with earnings eating estimates and operating profit up by 19%. stocks up by 2.44%. stephanie: the story is about

expectations. we have not had expect -- have not had expectations driven down attack.since the paris the numbers out in the last 24 hours, nike missing estimates and looking for earnings in a single high digits. they did not like it. the stock is down 5%. market movers in europe and the u.s. as well, let's get the first word news. david: authorities in belgium are continuing the search for suspects in the country's worst terrorist attack, ever. the third man in the surveillance video -- the other two our brothers who are believed to have been suicide bombers. prosecutors say they found more than 30 pounds of explosives at a apartment.

you details are out involving apple and the fbi's hack into an iphone. president obama is now in argentina. he arrived early after a flight from cuba, the first visit by a president since 1997. he was to show that the u.s. and argentina are on better terms. stephanie: apple has been front and center in its battle with the fbi and the request to unlocking iphone used by a gunman. it turns out the fbi may not even need the help of tim cook to gain access to the phone. how do the terror attacks in brussels impact the debate

around privacy and security? we've got the cofounder of talent chair technologies. joe, we have been talking about this apple battle for the last several weeks, but what does it mean when we say tim cook is not going to give you permission and it turns out you may not need him? joe: it is surprising and an interesting issue. like asking a is politician about abortion. i think both sides are pretty scary. stephanie: from your perspective, what is going on? joe: at a higher level, what we are saying is when you go to war as a society, the role of intelligence and technology is to help us not have to become like those we are fighting.

that is what we hope technology and intelligence can do for us. in terms of investing, where are you investing? where you see development in terms of intelligence, what you are putting out there? joe: there is a lot going on with how governments operate. there is a big gap between how governments are spending their money and what is possible and it is a big opportunity. this is a business program and i want to talk about the business and what it means to financial markets because so far, not a lot and when i look at this discussion, it has been dominated around apple but what we have not discussed is them facing a quarter of sales construction. look at -- contraction. what can we do to turn that around? joe: there was a long-term technology and product cycle and i think the thing that matters the most is how much of an impact it will have in the next five or 10 years.

i think apple is standing up for something they see that could hurt us i've years down the road if silicon valley and they're not able to stand up for this kind of embassy. stephanie: you have done very well. oculus made quite a bit of money. in terms of virtual reality, where is the next great opportunity? joe: there was a lot going on with virtual reality right now. people are overestimating the space for the next two or three years. you see a lot of money going into the ground. i'm bullish on the space in a long-term but in the short term, we have to be careful. jonathan: -- stephanie: money has been falling in the sky in terms of every tech and app out there. we have heard from the likes of mark benioff say we will see debt unicorns. what do you think is going to happen? joe: we will definitely have a few rhinoceroses.

has been a big valuation pullback, but there are still a lot of companies doing really well like all the top business ceos are spending time in silicon valley because they like heading that failed to something that is heavily -- they see something that is heavily impacting their businesses. because of that and the around the uber effect and they have to get in there and you see these people that have stepped into snapchat and they blink and had to write it down. investing, you can have a couple of things that don't work out and you are still doing extremely well. with the platforms to see emerging, you will have a lot of big winners and people are still doing very well. stephanie: on paper. jonathan: a discussion that has happened so many times, never mind public markets and the

nasdaq, i want you to talk to me about the valuations in the private space. if i see bubbles, i see if there. -- it there. joe: this is a great market. problem ision, the the bids will fall and you won't see the real valuation for some time. valuation, it all fell out in q4. that said, there are definitely a few areas of companies that are getting obliterated. a lot of financial companies pretending to be financial tech companies. there are a lot of these companies that pretend to get a higher valuation and business models with no margins and a lot of those will be in trouble. palantir? what about you have not gone public, can those employees sell shares in

the private market to monetize? we are doing extremely well and the secondary markets are still evolving. think othersng i are figuring out how to deal with. say is iti hate to different this time, but do you need the public markets anymore? joe: a lot of my companies do plan to go public over the next three to five years. now is probably not the best time and when you are a venture capitalist, most companies go public at about seven to 10 years. 100%, itgrow at over is not a good idea to go public because there are not any comps. and if these companies are going to keep running their businesses before that. stephanie: why are we seeing more efficient secondary markets and privates? you see people say they invested

in uber and they can't get out of their positions? i think it is definitely a big issue where this is a whole new market that never existed before and we are seeing big players move in and a lot of them got scared of evaluation and pulled back in december -- in september. you'll see a lot more players step in. stephanie: every banker on the street is so panicked about syntax -- people continue to hate on banks. why does it continue to be a great opportunity or are you worried about regulation knocking on your door? of bank seeing a lot ceos in town and they are outsourcing a lot of what you're doing. if you take a small piece of that, it leaves a lot. jonathan: a quick question.

silicon valley versus london, who wins? joe: i think what matters most is it -- is the technology culture and is why the biggest companies in silicon valley for the engineers are. london is learning more about technology culture. i think new york is ahead of london and silicon valley is ahead of new york. stephanie: you are involved in a shopping app. is it a good idea to be involved in anything related to shopping and adapt in the world of amazon? joe: it is a top global commerce has -- obile and it stephanie: how did it pass amazon? right now, number one is facebook messenger and number two is wish. they have about -- they have thousands of merchants in china selling to america and europe. mobile was an interesting interruption were a lot of companies had to prove they can

win on mobile and is why facebook has gone up so much recently. which is now winning ahead of the old players. stephanie: give us a snapshot of what you think the economy looks like. we are talking about a massive slowdown in china, middle income of consumer of the united states evaporating. is it is platform is doing so well, where and how? joe: it is doing well with consumers who otherwise would be going to walmart. parts of europe were walmart is not able to go and wish is dominating because people want the best possible deal. dollar stores all perform well when the economy goes down. you have things like wish filling in that role for mobile consumers. stephanie: how does it beat amazon? joe: selling and operating things through mobile is different than the web and these guys are really good at data. they know how to acquire users on mobile, better. you can't win all day

long. what is painting you -- paining you? joe: there are a lot of great intelligent teams in silicon valley that got used to the back that money was really cheap and they make their plans based on the fact that it is easy to raise, next year. if you are not making money in this environment, it is hard to raise, next year, so i am worried about companies that are not cash flow positive. stephanie: when we speak it is companies, they talk about their boards and fundraising. when will they start to talk profitability? joe: you are definitely seeing all these companies moving in that direction. a platform that is awesome as airbnb, they will be able to raise money almost a matter what because they are one of the most top companies. if they are not moving toward profitability faster, they will

be in trouble. stephanie: show me the money. joe lonsdale. so good to have you. thank you. great conversation, now turning live to the new york auto show. matt miller is on the floor with ford motors ceo. >> we appreciate your time, this morning, what an amazing concept, i'm always excited about concept vehicles, but more exciting is, it has been a long time since a new navigator came out and i'm guessing it will be a new margin driver for you guys. mark: it is an important product for us and we have a very loyal owner base and we are growing our sales and the largest growth in the last three years has been in a 25 and 44-year-old major -- age group.

a strong indication of the new navigator that is coming, next year, with the exception of the gullwing jordan -- gullwing doors. matt: last year's hit was the lincoln continental that is now coming out in production. -- what does lincoln mean for ford motor company? mark: when you look at the auto industry, it is about 10% of the total industry, a third of the profits, so clearly luxury is grown the and we have ford business over the last five or seven years, when customers are ready to go and move to a lecture reviewable, we want to be there for them with a great brand that is differentiated and unique. know two thirds of your profits come from this country but you are growing like gangbusters in china. lincoln is a name a lot of the chinese are familiar with and

you are investing $5 billion in lincoln. a lot of that investment is going towards opening up in china. how is the growth, there? mark: when you look at the chinese economy, it is getting off to a good start beginning in this year, the car market cooled off, last year, but we have seen some stabilization and growth the first couple of years of -- the first couple of months of this year. lincoln has done very well. we sold over 11,000 lincoln's, last year with just two models and less than 25 dealers and that has been the fastest growth rate luxury brand in a long time. we will have 60 dealers in 50 cities by the end of this year with the lineup putting the new continental. we are really encouraged by the reception. reception here in the u.s. to the f-150 was great. sales in europe are bouncing back. overall, the industry is running hot right now.

are you concerned that we are running too hot, that we are set up for a downfall? we think the current economic conditions, barring any kind of shock, the next couple of years can be supportive of automotive sales. we are looking at the data. we are looking at income growth. we are looking at labor growth and consumer confidence. we are looking at the physicals. the average age of a vehicle in the market in the u.s. is 11 and a half years. every year, there'll be some replacement. about thee talking recession, but the data is not telling us that. we have never got into a recession without unemployment going up. we will not -- we are not seeing that, so we feel good about the market although we are always on the lookout for data telling is different. matt: you have an article

talking about ford's readiness for any kind of downturn. not that you expect one, but you put the company on much stronger financial footing than it had been. how do you feel about that? feel good about that, we have our break you levels down in the u.s. to about 11 million units. that when make sure the next downturn comes, we don't know when it will happen, but there are always economic are ready for it and able to stay profitable and maintain dividend. matt: is this concern about a downturn the reason we don't see any growth in the equity? you're making almost $1 million a month in pretax profit in the market is at an all-time high. yet, the stock does not seem to gain? mark: there are concerns about china, we think our stock is

undervalued, but we are not getting discouraged. we think the market is underestimating the strength of the u.s. market, the car market will stop there underestimating -- the car market. . and wee underestimating will just stay focused on the four things that drive shareholder value, rowing revenue, expanding margins, reducing risk, and continuing to report to shareholders. matt: thank you so much. be the new lincoln to get you and the kids to soccer practice. stephanie: if there is one thing i define myself as, it is as a soccer mom. so much to mark fields, president and ceo of ford motor company. ♪

stephanie: i am in the hpe green room, coming up next week at an exclusive interview with james bullard. jonathan: the fifth of the morning meeting, managing director and head of u.s. credit strategy for city will be joining me any moment with fantastic stats from a report of his on the high-yield market coming in at about eight. steeple break the credit markets for us, next. ♪

jonathan: we had a technical issue and i have -- my apologies for that. donald trump and hillary clinton have extended their leaves in the race for the nomination. 35 people were killed in bombings in brussels. donald trump spoke to all the respect to discuss the threat against the u.s.. >> the first thing you have to do is get them to respect the west and respect us. if they will not respect us, it is never going to work. >> so one element is to have

people in the islamic world respect us. >> you will not be successful unless they respect you and they have no respect for our president and they have no respect for our country. >> you are asked about whether you would rule out using tactical nuclear weapons against isis. have you ruled that out? >> i would be very late compared to my opponents that are running. >> you would rule in a possible -- the possibility of using nuclear weapons. >> i would never want to rule anything out. i would not let the tell you that because at minimum, i want to do think maybe we would use them. it is the worst thing when we do these interviews, with everybody, not me and you ask a question like that and everybody comes clean and they are so honest. we need a verdict ability, we are enemies, isis is the enemy and they are not wearing a uniform, so we don't know who they are.

when he offered it to ability and when you ask a question like that, it is a very sad thing to the to answer it, because enemy is watching and i have a very good chance of winning and i don't want the enemy to know how i'm thinking. with that said, i don't rule out anything. i would say definitely, nuclear weapons are a last resort. extended donald trump his lead last month -- last night for the republican nomination. later today, you can catch the entire interview with -- on with all due respect. ♪

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first-quarter loss and another 2000 job cuts. trading revenue could cut as much as 45%. in just a few moments, bloomberg's own tom and mike will be speaking with james bullard in the next was to interview. ♪ stephanie: we are about 30 minutes from the opening bell in new york city. you are watching "bloomberg ." moments wen a few will be speaking with james bullard and it's was an interview. looking forward to this. about 30 minutes away from the open. let's get up to speed on stocks. coffees if you were

plunging. futures down by 22 points. s&p 500 futures negative two points. over in london, five copies in that co -- coffees. some resilience in the last 24 hours after the terror attacks in brussels. the stock is up by 2.23%. another strategy update. five minutes after the last strategy update. 1.3 billion swiss francs cut. brightly.ound shining $1.41. three months to go until the referendum. the u.k. future in the eu is in doubt. big, big part. look at the treasury curve this morning. 10 year yield on one basis point. if you're

inflation, down about 2%. stephanie: he will not be looking at the treasury curve much longer. you will be looking at our solicitor interview james bullard. to all of our listeners and viewers on bloomberg radio, television and bloomberg.com. we are speaking with james bullard, president of the st. louis fed. considered a centrist on the fed and somebody who follows the macroeconomic developments very mostly. a lot going on in the markets these days as investors try to reprice the idea of fed rate cuts or increases. you went from a 4 rate increase two in december 2 -- to last week. markets still pricing only one. what is going on? if you look at the numbers, at

your forecast, you should be raising rates already. is this a mistake? are we confusing people at this point? james: i have started to wonder about the efficacy on the policy rate part. we are implicitly getting some kind of forward guidance through that dot plot. i'm wondering if that town of productive. when we were at zero and then we put out a forecast of one we were going to come up zero that was considered forward guidance and helpful. now that you are off zero and projecting these over the next two years you are still implicitly getting forward guidance. i am not sure i am comfortable giving that can afford guidance in this environment. in the past you look at the greenspan fed or the ecb they never gave any kind of

indication about where rates are going to go. i think that serve the purpose because a cap people focused on what is the data justifying at this point. it let market expectations around. now we have a dot polt that has -- dot plot that has the median lines on it. mike: the fed to get rid of it? james: i suppose it wouldn't do much good. you have a lot of dots. i think it's an important issue we have to think about. what are we really doing with this dot plot. financial markets have been talking about it a lot. we have our own communications committee that talks about it a lot. mike: which dot are you? james: i am not revealing my dot because i want to get out of the game of how many rating increases this year.

we are going to react to the data and we will take a reasonable policy delegate inflation back to target and on a good recovery path. tom: this is the st. louis cardinals odds of getting to october. the blue lines as the boston red sox. i saw a pickup truck back up to a mississippi river. from indiana university to the assist -- mississippi river. is it in your textbooks? james: no, it is not. central banking was turned upside down in 2008, right around the time i became president of the st. louis fed. tom: which hymnal are you speaking from? a very goodve research staff and it work on these questions everyday. we have a lot of good ideas and theories but it's not the same world we lived in the 1990's or the early part of the 2000. suggested colleagues

yes, indeed we should consider a rate increase. do you think the economy will develop to the point that april should be considered a live meeting? would you consider raising rates in april? james: i think all meetings are live meetings. chairman yellen said so. -- saying base of the economy. james: i think they should all be live meetings. i think it hurts is that we have is alternate meeting thing. i think we should make all meeting identical. please do press conferences. i have long been an advocate of this. that will allow the committee to come into a meeting, assess the data in april and see where we are. the data between december and march was not all that different. it didn't look like that we are that far off our path at the march meeting. i think it was a credible case to be made to move in march. we did not do it and now we can

look at april and see what it looks like only gets april. mike: you are saying it would be credible to consider a move in april? james: we are basically on the same projected path that we set in december. maybe a little bit off. you can argot global risk or gdp growth. outlook is maybe a little bit lower. it looks like labor markets are improving. you can probably make the case for moving. tom: let's talk about the great work summarizing the word "overshoot." you have core cpi movement. a number of times -- cleveland is a bank east of st. louis. the cleveland cpi, not the st. louis cpi, they are migrating higher. can you afford an overshoot in inflation? james: i think we will overshoot on inflation. that is what is going to happen.

fedou look at the dallas trimmed mean, it's 1.9% and moving up. i think all these inflation measures, if you look at them, they are moving up and probably will come over 2% by the time we get into 2017. tom: is that overshooting part of the so-called inflationista territory, or you can you find a constructive inflation at the imf? tom -- james: i found the whole discussion of this issue -- if you're at 1.5% you're missing by half a percentage point. if you're a 2.1% you are missing by 1/10. it's better to be a 2.1 than 1.5%. it's a symmetric target. you can be above or below. there is no problem with that. i think we are going to overshoot and hopefully that

will follow my policy choices and we will not overshoot very much. i think google probably overshoot -- we will probably overshoot. mike: if you overshoot, disinflation low enough that monetary policy can catch up? the argument has been inflation can get ahead of the fed and accelerate to quickly. james: i think the odds we will fall behind are moving up modestly. i do think that labor markets are continuing to improve. we will be at 4.5% unemployment by the end of the year. all other measures of labor market performance are very strong. you will get a phillips curve effect. you have got stabilizing oil prices that will help headline inflation,. highave got pretty increases on average in house prices and other things and rents. --hink mike: you can catch up?

james: yes, falling behind the curve is something that has happened in the past in central banking. i think we will be able to handle the situation this time. tom: is st. louis the central banker to the world? we speak of chairman yellen. can you state the collegial whether it isomc, atlanta, dallas, boston, you are combined central bankers of the world? james: the u.s. central bank it is a -- world leader. economy is a similar size to the u.s. economy. you've also got rising china. china has a different -- we also have japan. china has a different economy. not as much capital flow. i managed exchange rate regime so they have a different situation. mike: one thing we do not given the fed meeting is a sense of

what it is you are looking for as a committee. what is the reaction function now? what would make you move? if overshooting on inflation is not only ok but expected in the jobless rate is going to go down to 4.5%, what are the triggers if you have not lived yet? james: that is a great question and why should listen to my speech tomorrow. we made a projection in december. tammy got to march and if you look at the data, it was not very different than what was projected in december. so when do we move? we must've been thinking of some other kind of data other than what was on the projections. we cited global risks. i cited inflation expectations. there are other things in during into the decision other than just the outlook for gdp and inflation. i think that is causing some confusion among policymakers ourselves and the financial market participants. mike: the other thing that was not in the risk statement is

risks. where do you see the risks? james: i have never liked the balance of risk statement. you are talking about a distribution. it is a hazy object anyway. you will talk about subtleties in this distribution about how much is in this tail versus that tail. all kinds of things. as far as overkill how much precision we can really have about what the distribution looks like. i have never really liked this idea. tom: this is right right wanted to go. we talked about the cross moments. there are 12 people other they get it in they'll have bloomberg terminals. the laureate of m.i.t. that invented economic growth ge fearg says modern ds he does not pass the smell test. what is the new theory to replace the certitude that too

many of your colleagues -- you have been a fresher frets -- breath of fresh air. framework, a way to do macroeconomics. as far as the assumptions you might make or the models you might build it would fit the data. there was a wide variety and you get all kinds of possible theories within that framework. you should not brought that. what you should do is put the right assumptions and, show you can match the data. tom: he talks about unexpected shocks. one of which that we talked about this morning is the idea we are bringing in disinflation and deflation and. and other shots dampening u.s. rates. the you go day-to-day in st. louis with your credible research combine feeling that rates would be higher if?

have been very interested in this issue of a global information -- inflation factor. it is moving around. it's in a down cycle right now. we are trying to make policy while this big thing is pushing all inflation down. i don't think we've been able to get a characterization that i really like or willing to promote. i am interested in the idea. it certainly feels that way when you're making policy. it feels you are swimming upstream all the time. mike: you are seen as a dove going into the march meeting. you were talking about inflation expectations possibly be coming on board -- unmoored. if you look at the five your forwards over the last six weeks, they are going up again. is that problem behind us? james: i would like to see further stabilization and inflation expectations. i have been concerned about this. they reis post crisis lows in

february. they are stabilizing. i think that is a hopeful sign. i hope they will continue to go up. they seem to be highly correlated with oil prices. that is disturbing because oil price movement should not have anything to do with the five-year forward inflation measure. we are watching and continuing to watch this carefully. i'm concerned that we not normalize in a situation where inflation expectations are going down. my interpretation of europe is that they waited too long at the ecb whether inflation expectations for drifting down. they waited too long to take action now they are -- it will take a long time to dig out of the whole. mike: a lot of people have asked what we have not seen a serious pickup in inflation given all the stimulus that has been thrown at the economy. zero rates, qe by the fed.

he suggested zero rates of the problem in and of themselves. james: yeah, sometimes i put on my more radical had and i gave ma-zero.ech on per i gave one in frankfurt in europe just on friday night. the idea is that because of the fisher affect, which demonstrates expected inflation, you think that real rates determined by the market. expected inflation is the fall. that idea has been gaining more currency but it's untested at this point. zero for people that follow bloomberg surveillance, we get blistering e-mails from people that are not the elites. i don't have your education or our zip code. i want to speak to the people in the st. louis district who go, i

will give you perma-zero. it has been my income for 10 years. where does the economic growth fund come from? with a guy that is seen the manufacturing drift away, that chronic sense of perma-zero . where do we get growth? james: the central bank cannot drive the growth process. there was a business cycle. if you run a good policy, there is a cycle but it is not as big as previous cycles. the growth rate is served by long-run factors in technology and human capital. and with the u.s. needs is a better medium-term growth strategy and you need everyone to get on board with that growth strategy. tom: in the next president do that? does it come from congress? the next president could definitely do that. mike: the implication of this idea is that the sooner rates

rise, maybe the better. qe,e to the zero bound and all of your extraordinary policies, much of which is still in place is contributing to growth. are they still effective? james: i think they are still accommodative. anhink we are providing accommodative policy with the zero interest rates in the balance sheets. i do think you want to be edging closer and closer to something of a more normal setting so you don't get stuck in this zero rate environment the way japan did. you want to edge towards a more normal nominal interest rate structure. i think that would get us back to the kind of equilibrium we had in the 1980's and 1990's, which was really pretty good. they growth economy. everybody understood with monetary policy was doing. . interest rates moved in the right way that is what we would like to get back to. it'si suggest we say that

not the vice chairman of the fed. it was irving fisher?

>> it drives me insane. full of the chart again if you would. the basic idea is the blue line is wrong. and somehow that blue line is going to migrate higher. you have a great respect for that blue line is in the market. do you assume it will stay where it is and you will catch up? james: we have talked about this many times before. we have had it for a couple of years now for the market has been pricing and something more dovish. more dovish than all the dots in 2017 and 2018. that is a huge gap. tom: that is the headline. james: that will have to be reconciled. i'm worried it will get reconciled in a violent way. i think what will happen is

that as inflation starts to come up and we get more credibility, it's going back to 2%, and in my view going over 2%. i think that blue line will serve the quebec up. what is feeding into that blue line is a lot of ideas about central banks getting control. they will be able to get back to 2%. those kind of ideas. i think those will go away as inflation rises in 2016. mike: we are talking with james bullard about the dots and how the fed's forecast is much higher. -- blue line being the hot market expectations. your former colleague from the minneapolis fed writing for bloomberg yesterday suggested the fed has a credibility problem. and amises to be gradual, minas of the jettisoned as inflation picks up.

it promises to raise rates and a minus it drop it if the economy slows. "officials must recognize their expectations for the economy are likely to prove wrong. as a result they should be much clearer about their willingness to make large and rapid changes in monetary policy." would you agree? narayana very well. the key word is "promises." cep some kind of promise? mike: the best forecast of economic projections. james: chairwoman yellen says absolutely not. it's a conditional thing that depends on how the economy develops. i think it could be misinterpreted as a promise or for guidance. that's why i'm increasingly concerned about what are we doing with these policy projections. is it really having the affect

we intended it to have which is just kind of gentle guidance about what will happen in the future as opposed to a commitment to the fed will behave in the future? to me i do not want to be a commitment. nevertheless you can see why markets can interpret it that way. he is saying with the better about showing we will move around for the data. mike: i have to ask about the latter half of his statement, the idea that we would like to see the economy slow. what are the odds of that? james: that is not a base case. you can always get hit by a big shock. that is the world we live in and maybe it will happen. but that is not the base case. i think we will slowly good growth in 2016. mike: james bullard from the st. louis fed. thank you for joining us. interest rates are going to have to rise as inflation rises and

growth continues to improve. james: always great to see you guys. go cardinals. mike: we didn't even get to ask you about the cardinals and the cubs. thank you. this is bloomberg radio and bloomberg television and bloomberg.com. jonathan: a phenomenal interview with the st. louis fed chair. special thanks to tom keene and michael mckee. we have got to talk about policy and communication. let's begin with policy. several headlines. the federal reserve risks falling behind the curve. inflation can overshoot. we can handle that. i have always been told of the federal reserve in the bank of england is looking to hike and be gradual. jameslent i get from bullard this morning is a gradual will be a difficult task at this point. stephanie: but what they don't want to do is cause any violent spikes to the market, which is a tall task given the massive

volatility we have already seen. we have got the presidential election around the corner. jonathan: you bring up this dot. he hates the dot. he was to change the medication. that's a challenge at this point. we sit there and say look at the dots. the market looks at the dots and the fed checks their tail. stephanie: he once they get out of the corners and the front foot it again. we will take a break and you are watching "bloomberg ." we are just four minutes away from the market open. ♪

stephanie: we are moments away from the opening bell here in

new york city. tracy alloway. holiday weekthis but overall, we have seen a broad-based rally if you consider where we came from january. half of the world stocks are in bull market territory. i believe i can hear and a distance that bellringing. just coming off comments from st. louis fed president james bullard who actually is saying we need more flexibility, we need space to get the job done. >> it has been an amazing time for stocks. every risk asset has rallied over the past couple of weeks. a couple of things are driving the rally. we saw a massive stimulus from the ecb. we saw japan go to negative deposit rates. then we had the dovish fed statement last week. i'm sure they were also talking about it. jonathan: the tone that we both saw was that -- he was a little more diplomatic. the federal reserve should look at the efficacy.

a technology the dot plot had want them toyou tweak their communication after this. there's appear -- there appears to be a grassroots campaign among economists right now. people think they are outdated now that we are moving away from the zero bound and it is more about the interest rate path. ofple could get some idea the glide path out in the future. now that we're there, it turns out people do not like it so much. who is janet yellen's customer? -- caused have called a market selloff? maybe the overall mission is to improve the conditions of the economy and monitor them. jonathan: you are spot on. i will say for the federal reserve, they want to talk to the main street but they want to

shape markets on wall street to help make the markets more effective. i think that is a difficult thing to do. stephanie: i have three kids and it does not matter which one of them is shouting the loudest. everyone has to go to bed. the market gets more attention than it deserves. what do you have to say, julie hyman? as long as i remember how many kids i have, it will be ok. react toseeing stocks oil prices. a quarter of 1%. it seems to come down to oil prices. here, wearply lower had the american petroleum institute. we get the official government

number at 10:30. i will bring you that and we will see if there is any change given what the numbers say. affecting the price of oil is the rise of the u.s. dollar. the dollar getting strength versus the japanese yen, also putting pressure on commodities. nike would be the stock move her to watch today. that is coming out with numbers yesterday. full-year earnings and sales are humming in a little below the most optimistic estimates. those shares are off by 5%. a little softer on the s&p 500 and the dow jones. let's cross over to abigail doolittle. >> the index is down but this follows a five-day winning streak. it will be interesting to see

whether that could last and whether we will see a down day through the close. 13%, $270 per share. the company is likely to beat fourth-quarter results stay after the bell. potential really tied to athletic wear, a lululemon could trade down to the weak guidance that julie just mentioned. higher.n is trading we will see whether or not back in last. growth ina boom in the entire category. estimates were so high. remember earlier this month, the bankruptcy announcement out of sports authority. we need to continue the conversation around the markets. seventh, it is

the seventh birthday of the bull market and i want to say it is true -- going strong. it is tough to find any aboveipants you have oil $40, recovering losses for the year. is theyou think this case? is it just the ecb a week and a half ago? julie: that is the big question. is this a growth story? a lot of people out there think it has more to do with easing. i saw a goldman sachs note saying if you look at financial conditions, there has been a huge drop in the tightening of financial conditioning recently. there are a whole bunch of technical factors around things like stocks, a lot of people talking about this being the biggest squeeze of all time. we will have to see how that

plays out. at though if you look portfolio, he has been brutalized over the past weeks. these are the moments where technicals in the market matter so much. >> very true. the other thing people are talking about is a breakdown in correlations. table if weoff the are now back off in a risk on situation. i want to take it old school. throughthe p/e ratios europe, through the u.s. where theal situation market trades at seven times expected earnings. everyone on the program is incredibly pessimistic. that is a richly valued market. >> yes because you are looking at the market. global risk around the world. oil prices are up. thehave got oil and china

refugee crisis, and the upcoming election. there are so many points that have investors worried. >> you got all of that worry. were short going into the past couple of weeks, you had a very painful time. do not forget hedge funds were superlong at the beginning of the year. i am betting they are not happy about it now. about last year, hedge funds looking at fundamentals, who were short -- short on the market, and they got carried out and said, i cannot do this, they got long into the end, just like the year before, because they were humiliated in 2014 when the s&p outperformed funds, this is the tricky thing about the market. it is all about timing. you can be right about the fundamentals and get completely washed out because the ecb

unveiled a new bazooka. it is very difficult now. >> or just be really rich and invest your own. jonathan: tracy alloway, thank you. stephanie, going into the end of the year, banks? credit suisse? the ceo blind-sided, ramped up holdings of distressed debt without informing senior executives. francine lacqua spoke in an exclusive interview where it was explained why he is cautious going forward. >> we are confident that this is a dislocated comp -- economy. jonathan: we are joined by the bloomberg team in the city of london.

michael, just to start with you, credit suisse, the drama, i'm were ever sitting down and we all went and said to him, when we start looking more like ubs? the bank started to look a lot more like ubs. they cut brady dougan. they did. >> they are looking more like ubs. you have the surprise today of they'rehe reasons cutting back so much in the credit business is because the ceo did not have a proper idea of just how big they were in the business. he said he did not have a full understanding and was surprised the amount of illiquid positions they had. this is something you do not expect to hear from a ceo. stephanie: let's talk about the

riskiness of the statement. the elizabeth -- elizabeth warns of the world and populist opinion says they are reckless and they do not know what they have on the books. unwieldy and too big. then you have a ceo only in the seats for nine months, saying i have been blind-sided. how does that happen and how about communicating it in a tighter way? >> it is unclear how it happened. he says they found out in january when they started to get the numbers and from the fourth quarter and they had a large amount, almost 600 million in losses. they then started scaling them back in january and february. you have another 300 million of write-downs. i'm not quite sure how this happened. it is certainly a problem. investors are saying this is not

exactly making them feel confident in the management when you have a strategy update and five months later, you redo the strategy update because of new information. if michael thought covering european banks would be camera, hisdavid job as a little more kickback compared to yours. aboutsit back and think what happened here. a strategy update in october. an ugly first-quarter and the bank has turned around and said they need to cut another 2000 jobs. >> that is dramatic. the story of wall street right now. of last year, end a lot of executives, management teams, were hoping the first quarter would look better. up.ing would start to pick that would put a list on the businesses.

people were saying march would be better. march was not much better. it was just ugly out there. we already heard from the deutsche bank ceo. we will not be making money this year. francine lacqua said it earlier, this is a human capital business. how do we keep those humans in their seats at places like a deutsche bank or a credit suisse when ubs paid up 11%. a third of that business, did not even get a bonus, zero. teams in theement u.s. talk about option audi. you have got to cut heads. it is as simple as that. we are hoping we get a pickup in trading.

stephanie: with the amount of layoffs that have happened, you have got to wonder how bloated and fat they were before the crisis. i will get technical. people havellion been laid off at banks since the .risis debuting audi's news spider. they will be joining us next. you are watching bloomberg . ♪

stephanie: i am in our hpe greenroom. matt miller will interview carlos at the new york international auto show. over to matt miller at the international auto show, sitting down with the audi of america president, scott. matt: scott, i appreciate you joining me. all about first of the diesel scandal and get this out of the way. folks like an is having the issue. is it hurting your sales in the u.s.? scott: [inaudible] 200-2000 units, a lot of great momentum. i personally do not look at it

from a business point of view. customers were disappointed. we broke trust and we will make it right. or 20,000ne person people, we will make it right. that is important to me. ont: you have been firing all cylinders. the q5 has recently overtaken the a4 as your best seller. the q seven, you are having trouble keeping on dealers lots. scott: january and february, we were up 3% year to date. the market has been down three points, continuing to outperform the market, which is fantastic. the car is basically sold out. about two dealers weeks ago. launching fresh, brand-new products. continuing to break records. in a world of suvs and crossovers?

scott: 43% of our business is suvs. i see it potentially becoming 50% of the business and we cannot lose sight of the fact it is theegment, sink's largest segment in luxury. still 25% of the business. matt: what else is there? scott: some of them are replacement models. a few spots in suvs. i do not want to get into that now. a long-range electric car. we see a lot of opportunities. all electric or zero emission vehicles. do you think audi needs to take place in that market?

100%. the mandates out there, i think more importantly, the market will tip in this direction. once you get the business model right, the technology matches up. that market will tip. matt: you mentioned the luxury market getting tighter. you are releasing the most expensive car in audi's's history. the most powerful, the fastest. where do you see buyers for this? sets the toner for audi. where the brand was when we launched that car, we are selling 70,000 units in america. the brand was not well known. .e launched this iconic car 200,000 units. racing history was brought to life and it transformed the brand. absolute iconic halo. there is always a buyer who wants the absolute best.

racehink about this car, a car, 200 horsepower. people want that. space forstill see this. global wall street is your customer for the car. scott: we see it with innovators and people who want the best. there is a buyer for that. matt: this got you deeper into racing.

absolutely massive credibility with racing. matt: i look forward to driving all of them. thank you so much. back to you in the studio. >> nike gave an annual forecast after yesterday's close. the competition from under armour is putting more pressure on nike in the u.s. historic cuts in the oil -- billionsld lead of dollars due to plunging oil prices. the iea calls it the not to dish and -- not too distant future. david cameron says the membership to protect written's $64 billion wine and liquor industry. trade group says 90% of respondents to a recent survey

-- survey will remain in the eu i want to go to vonnie quinn with what is next. vonnie: we will speak about a lot more. carlos will be joining us as well. all of that from the new york auto show. we will stay up to date moment by moment with events in belgium and we will speak with the ambassador to washington, d.c., with ultram. we will be joined later in the program. >> thank you to vonnie quinn. so much more to cover here. we have got a big day. autos. politics, technology, and markets. credit suisse. final thoughts on bloomberg , next. ♪

stephanie:stephanie: nine months into the job, he said he was already cut back. blind-sided,e is how does that happen? phenomenal on the downside. the stock trading higher this morning. kim of the st. louis fed, take a listen to what he has to say. >> we have that as part of our

forecast. that is what will happen. 1.9%. and moving up. they are all moving up and will probably come over 2%. >> he does not want a violent market reaction. he really pushes markets to move. jonathan: that does it for bloomberg . will today, matt miller visit the ceo of the new york international all-star show. --dbye for bloomberg markets goodbye. labor markets continues next. -- bloomberg markets continues next. ♪

>> it is 10:00 a.m. in new york. from bloomberg world headquarters in new york, i am vonnie quinn. mark: i am mark barton.

this is bloomberg markets on bloomberg television. ♪ vonnie: we will take you live to brussels in the next hour. here is what we are watching. cities on four suspects in yesterday's's deadly terror attacks. mark: another loss in the first quarter as the swiss bank cap's and additional 2000 jobs. vonnie: live to the new york show for an interview with toyota north american ceo. data rightonomic now. julie hyman has the latest. julie: new home sales coming in lower than estimated here 1200 annual pacethe here. higher than estimated but a smaller than estimated month over month increase because of